Highlights of Most Recent Survey

Highlights of the Fall 2015 Millionaire Monitor (Affluent Market Tracking Study #27)

As an inexpensive way to conduct research among the affluent, custom questions can be purchased in these tracking studies for your exclusive use.

1) Overview

Major findings are detailed in section 2 below.

This report provides extensive current and historic trend data, presented for key demographic segments, on the following:

• Purchase intentions for 8 major expenditures including autos, primary residences and vacation homes, cruises, and major home remodeling
• Expected changes in spending for 17 products and services including vacation travel, dining out and recreational and entertainment activities, various durables for the home, apparel, and fine jewelry and watches
• Who has a positive outlook for the economy and their personal wealth and their spending plans

Special topics included in this report:

• What the affluent plan to spend for December holiday gifts, how that compares to last year, and who will spend the most
• What the affluent spent in 2014 and plan to spend in 2015 for holiday gifts in the form of gift cards and other “currency” such as checks and cash
• The relative amount of gift cards purchased online
• How a personal bonus reward for gift card purchases would affect gift card sales
• Awareness of, prior purchases from, and consideration for future purchases for 18 fine jewelry brands

Two important marketing questions answered in new Fall 2015 survey:

• Which affluent and luxury consumers are spending on your products and which are still reducing/deferring expenses?
• Which consumers plan a general effort to reduce or defer expenditures and which will continue to spend?

The new fall report presents the above data for market segments defined by age, gender, income, and, most importantly, net worth.

These tracking studies are unique in that they are conducted by mail (similar to the Conference Board surveys for the Consumer Confidence Index) among projectable national samples drawn at random.

This is the 27th in the original and only continuing series of surveys that focus on the wealthiest 10% of all U.S. households, based on net worth, that now number 12.2 million households with a minimum $1 million net worth according to the latest research by The Federal Reserve Board.

The wealthiest 10% of U.S. households account for almost half of all consumer spending, and these surveys are designed to provide information critical for effective marketing to affluent and luxury consumers.

Buy our new Millionaire Monitor (Affluent Market Tracking Study #27) with a full money back guarantee. If you are not totally satisfied with the report, your money will be fully refunded with no questions asked.

The 63-page/50 exhibit Fall 2015 Millionaire Monitor (Affluent Market Tracking Study #27) is available at a price of $495. With a full 228 page set of 123 tables of cross tabulated data, the price is $695. To order, click here and tell us which you would like to buy. Please include the purchase price, your name, and the name of your organization. AARC accepts checks and charge cards.

2)  Major Findings

Affluent Express Positive Outlook about the Economy and Their Personal Wealth

The assessment of current business conditions (index of 100) is a nice improvement from the Fall 2014 survey (88) and indicates a slightly more positive view of the current economy, especially given the volatility in the stock market and the political and economic uncertainty around the world at the time of this survey. Of course there were some similar conditions in existence at the time of the Fall 2014 survey also.

The index for future business conditions (105) declined a modest 2 points from the Fall 2014 survey. The index for change in the stock market (100) is 2 points above the Fall 2014 index. While remaining near or slightly above neutral territory, these indexes suggest some comfort among the millionaires about general economic conditions and a somewhat positive outlook about the next 12 months.

The index for expected change in after-tax personal income (97) was up 4 points from the Fall 2014 survey. This index is now approaching positive territory for the first time since Spring 2008.

The composite ACE 12-month Economic Outlook Index (which is the average of the 12- month outlook for business conditions, the stock market, and household income) rose a modest 2 points from the Fall 2014 survey and at 101 is in positive territory.

The general public seems to be even a bit more positive about the economy given the September Consumer Confidence Index (103) reported by The Conference Board.  On the other hand, Spectrem Group’s Millionaire Household Outlook fell to an 18-month low in September.

Over a third (35%) expect their net worth (index of 119) to be higher in September 2016. The outlook for personal net worth and income is a positive factor for potential increases in spending.

The indexes for the change in spending for the 17 products and services tracked by these surveys are about the same as the prior two surveys in most cases. There was a modest increase (from 1 to 8 points) from Fall 2014 in 11 of the 17 categories, with domestic vacation travel, entertainment, and home entertainment equipment showing the largest increases. Dining in family/casual restaurants was unchanged. A decline of only one to three points was experienced by the remaining five categories.

Almost half (46%) of the respondents plan to acquire one or more of the 8 major items, which is a 2 point increase over Fall 2014. A substantial amount of additional potential purchases of the 8 major items are represented by the consumers that have yet to decide about a new auto, a cruise, a remodeling project, and the acquisition of a primary or vacation home (both of which showed some strength relative to Fall 2014).

Expectations regarding future income and net worth influence and/or correlate with spending plans. For example, the average index for changes in spending plans is 14 points higher (93 versus 79) for those expecting an increase or no change in their income versus those expecting a decline in income. The difference is 10 points (91 versus 81) based on net worth expectations.

With about a third (32%) of the affluent planning to defer or reduce expenditures during the next 12 months, this represents a small improvement of 1 point from Fall 2014 and a record low for this reading.

While the mood and spending plans of millionaires may have been negatively influenced in September by the increasing global tensions and the volatility and declines in the stock market, the recovery of the stock market during October would be a positive influence.

Some of the highlights of the special topics covered in this survey include: 97% of the millionaire households are forecast to spend an average of $2,773 for December holiday gifts, which is about a 7.7% increase over 2014 and represents a total of about $33 billion.

On average about 81% of the affluent say they will spend more or the same on holiday gifts this year versus 2014 and 20% say they will spend less.  With the potential changes in spending estimated by those planning to spend more and those planning to spend less, the average spent on holiday gifts could decline 1.3% from 2014 spending. However, it appears the affluent spent in 2014 almost 3% more than they had anticipated in the Fall 2014 survey, thus supporting the premise that people, especially the affluent,  often tend to spend more for gifts than they had planned.

The gift expenditure per millionaire household is about four times that of all households as estimated by the National Retail Federation (NRF) which has forecast a 3.7% increase in total retail holiday gift sales for this year. Deloitte has forecast a 3.5% to 4% rise in total holiday gift expenditures.

NRF research indicates gift cards have been the most requested gift item for eight years in a row. Almost 80% of the millionaires in this survey reported spending an average of $450 on holiday gift cards in 2014. This represents a $5.6 billion market (about 18% of NRF’s estimate of total gift card sales of almost $32 billion).

The millionaires in this survey also indicated giving about $19 billion in cash and checks as holiday gifts. It appears much of this gift “currency” could be converted to gift card sales if retailers offered a personal bonus reward for the purchase of gift cards. Over 90% of the millionaires expect to spend more in 2015 for gift cards and gift “currency”. About half of the respondents indicated they purchase gift cards online.

Another special topic in this survey was about awareness of, prior purchases from, and willingness to consider for a future purchase a list of 18 fine jewelry brands. Awareness ranged from a low of about 20% (Graff and Buccellati) to a high of 98% (Tiffany and Cartier). About a quarter of the millionaires were aware of only nine or fewer brands, and the average number of brands recognized was just under twelve.

Prior purchases of the brand ranged from a low of zero for Graff to a high of 50% for Tiffany. Only four brands were named by 20% to 27% of the millionaires (Chanel, David Yurman, Kay, and Cartier). All others were named by less than 20% of the millionaires.

Among the brands of which the respondent was aware, the brands that would definitely or possibly be considered for a future purchase ranged from a low of 14% (Graff) to a high of 50% (Tiffany). Of the remaining brands, the top four were David Yurman (49%), Chanel and Cartier (both at 35%), and Buccellati (32%).

It appears that retailers and brands have a large untapped market opportunity for selling more gift cards by creating compelling reasons why people should give gift cards rather than “currency”. In addition, many of the fine jewelry brands have an opportunity to substantially increase awareness and thus sales potential among millionaires.

*** Satisfaction Guarantee: Full Money Back If You Are Not Totally Satisfied ***

Buy our new Millionaire Monitor (Affluent Market Tracking Study #27) with a full money back/no questions asked guarantee.  If you are not totally satisfied with the report, your money will be fully refunded with no questions asked.

The 63-page/50-exhibit Fall 2015 Millionaire Monitor: Affluent Market Tracking Study #27 is available at a price of $495. With a 228-page set of 123 tables of cross-tabulated data, the price is $695. To order, click here and tell us which you would like to buy. Please include the purchase price, your name, and the name of your organization. AARC accepts checks and charge cards.

3) Research Methodology

Since 2002 these surveys have regularly measured and tracked the 12-month outlook of the most affluent households for the economy, the stock market and their personal earnings, savings, investment objectives, and spending plans for 17 product categories and 8 major expenditures. In addition, each survey contains special questions exploring new topics.

Unlike other affluent and luxury market research that is based on online surveys of panels of people who are compensated for participating in regular and frequent surveys, AARC’s unique direct mail surveys are based on projectable national samples drawn at random to be representative of the precisely defined population of affluent households, consistent with the research of the Federal Reserve Board.

Confident of their anonymity, the respondents to our surveys are typically more affluent and more open in providing confidential information. 

Surveys were mailed to a randomly selected, national sample of 4,500 men and women in households that, based on their income and ownership of certain assets, were expected to meet the minimum net worth requirement of $1 million. The overall survey response rate was 10.6 percent, thus showing the importance of this survey to the respondents, who have been a leading indicator of economic conditions, as when they called the recession in our March 2008 survey (well ahead of everyone else).

This report is based on the responses from 346 men and women who promptly responded and met the minimum net worth requirement of $1 million. Their households have an average annual income of $291,000, an average net worth of $4.1 million, average investable assets of $2.5 million, and an average primary residence value of $1.4 million.

The survey respondents represent 32 states and the District of Columbia. Eighty-four (84) percent are married. The average age is 60.9 years. Forty-six (46) percent are men and fifty-four (54) percent are women.

The maximum margin of error of this survey, at 95% confidence, is five percentage points.

Index values range from 0 to 200 and are compiled by subtracting negative responses from positive responses. The value of a neutral response is 100. An index value of 100 means equal positive and negative responses.

This survey is more informative than others for several reasons. Unlike some other surveys of the affluent, this is not an extrapolation of past spending that they have been asked to remember and reconstruct. It is designed to identify future spending plans and intentions.

Unlike most other surveys of the affluent, this survey of people excludes respondents who do not qualify to be among the wealthiest 10% of US households, based on net worth.

Research by the Federal Reserve Board and the IRS shows that net worth is a more stable indicator of wealth than is income. There is more turnover among the people in the highest percentiles of income than among the people in the highest percentiles of net worth.

Unlike other types of surveys where the respondents cannot be confident of their anonymity, the respondents to our surveys are typically more affluent and more open in providing confidential information.

4) Top 4 Ways to Use and Benefit from This Research

If your perceptions of today’s luxury and affluent consumers (who are often very different) are largely derived from what you read in the media and online, you are probably creating your marketing strategies and plans based on false premises. To stay ahead of your competitors, you need AARC’s new research report to understand today’s luxury and affluent consumers and how to market to them.

The surveys track plans for major purchases (vacation homes, primary residences, home remodeling, automobiles, boats, and cruises) during the next 12 months. The surveys also track planned changes in spending during the next 12 months for 17 categories of products and services. These include fine jewelry and watches, domestic and international travel, dining in casual and upscale restaurants, furniture, major appliances, entertainment equipment, home computer equipment, entertainment, recreational activities, collectibles, designer and non-designer apparel, and charitable and political contributions.

The new, expanded report format with graphs and charts helps readers to identify and understand the differences between affluent consumers and the true luxury consumers. These graphic elements, plus the executive summary and highlights sections, facilitate a quick read of a report rich with data.

Top 4 ways you can use and benefit from this research:

1) Develop an understanding of the general mood of the affluent and their expectations for business conditions and their personal wealth over the next 12 months. Gives you a basic perspective on general market conditions that will determine marketing opportunities and challenges.

2) Identify changes in the spending plans of the affluent for your specific product category during the next 12 months.  Shows you how potential sales of your product category compare to prior years and indicates what competitive pressures may result in your industry.

3) Learn which segments of the affluent market represent the best sales potential for you during the next 12 months. Identifies the market segments that are cutting back on spending and those that are continuing to spend for your product category.

4) Create your marketing and sales plans with data based on the future intentions of the affluent.  Unlike many other surveys of the affluent, this is not an extrapolation of past actions that they have been asked to remember and reconstruct.

These are the only research reports that provide the insight and understanding of millionaire households that is essential to the planning of effective market programs for this market.

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